The Indian rupee on Tuesday surged by another 32 paise to 48.76 against the greenback in morning trade in tandem with a strong rally in stocks amid steady dollar overseas.

In quiet trade at the Interbank Foreign Exchange (forex) market, the capital market resumed firm at 48.83/85 a dollar against its last close of 49.08/09 a dollar and later spurted to 48.76 before being quoted at 48.81/82 a dollar in late morning deals.

Forex dealers said the rupee drew support as the equity market rallied sharply in morning trade.

Strong equity market is expected to attract fresh capital inflows. Foreign Institutional Investors have been pulling out from equity which generally remained bearish in the initial eight trading days.

Indian benchmark Sensex was up 296 points or 2.21 per cent at 1030 hours on the back of favourable rainfall in some parts of country and firm Asian markets.